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Abstract
The European Union Emissions Trading Scheme (EU ETS) is the world’s first regional 10 carbon
trading market. This article is a quantitative attempt to examine the temporal and spatial
geography of European carbon trading. We show that carbon markets are especially sensitive to
two factors: staging across time (Phase I versus II of the EU ETS) and across space (energy
market structures in Europe). Carbon markets serve as a vehicle to better understand the
economic geography of financial markets. Building on the theoretical vocabulary of the geography
of finance, the article suggests that certain national factors (market structure) and institutional
factors (regulatory phases) better explain how carbon markets operate than company level
differences. These findings indicate that geographers have a key role to play in highlighting the
local ramifications of carbon markets if and when the world moves towards its ambition for a global
carbon market.